Stock market manipulation is an ongoing battle between the long and the shorts and so laws have been put in place internationally to try and help the prevention of stock market manipulation, especially with how the rich hedge funds have manipulated the market before to stop small investors from making large profits. Furthermore, when it comes to laws being implemented by individual countries, it is hard to keep track since laws are applied differently depending on that specific country and the one traders reside in, as these may not be the same. Because the stock market is used on a global scale Barak Obama signed a legislation in 2012 called the “STOCK Act”, where in the United States stock market manipulation is illegal under the securities and anti-trust laws. As a sub legislation under the STOCK Act Securities Laws and related secondary rules broadly prohibit fraud in the purchase and sale of securities, and the Securities Exchange Act of 1934, Section 9, specifically makes it unlawful to manipulate security prices.[1]
In the above graph, an irregular pattern in the fluctuations of stock price can be seen, this is a clear indicator of a stock market manipulation and can be seen as a repeated action and not just a single incident.
Conclusion
To conclude; the stock market can financially benefit most people as capital gain can be achieved when you sell a stock at a higher price than the price at which you purchased it, and dividends can also be earned (the share of profit that a company distributes to its shareholders). However, it can cause a lot of traumatic stress for some, as the investments can be unpredictable, profits are not guaranteed, and the information is very limited for individual investors who have no previous experience in the stock market. Furthermore, in this work we cover the key aspects so that the members of the public who are not seasoned investors will be able to understand and take away valuable information to give a basic understanding of the stock market, the mechanisms that allow it to function, and different actions regularly used to influence it.
[1] Wong, Scott (2 February 2012). "STOCK Act passes Senate by vote of 96-3" Wikipedia.
[2] John. S, 2021, ‘Stock Market Manipulation’, Forbes. Available at: New England Patriots To Re-Sign Ca Newton To One-Year Deal (forbes.com). [Access Date:15 March 2021]
Comments